Affluent individuals around the world bucked the depressed market norms of the last few years and managed to keep the luxury goods market bustling by investing in alternatives such as art, wine and supercars.

Companies such as Hermès SA, Michael Kors Holdings Ltd. and LVMH Moët Hennessy Louis Vuitton SA are gaining new customers daily, with 10 million new buyers wading into the market each year.

Many of these companies have given good news to shareholders recently, including luxury goods dynamo Michael Kors – known for its footwear, watches and clothing – whose shares soared 17.3 per cent to $89.91 (U.S.) in early February, after the company’s report of higher-than-expected profits.

September 23, 2011

Measuring return on investment might be tricky, but the world of finance is leveraging arts sponsorships to reach the super-rich, writes Claire Adler

By Claire Adler

Raconteur Media

September 22, 2011

Financial institutions are increasingly viewing the arts as a pivotal tool for building business relationships. Whether it’s a behind-the-scenes private exhibition tour with crossdressing artist and curator Grayson Perry at the British Museum, courtesy of AlixPartners, or watching a rehearsal of The Marriage of Figaro at the English National Opera and then chatting to director Fiona Shaw, banks, wealth managers and professional service organisations are determined to offer access to experiences money simply can’t buy…

March 28, 2011

Luxury businesses emerge from dark days of recession; some still waiting for rebound

By Eilene Zimmerman
Crain’s New York Business
March 27, 2011

In early 2008, business was humming for Wendy Brandes, a jewelry designer who produces her pieces by hand. During a Valentine’s Day sale for a small group of private clients, she grossed $25,000 in a few hours.

“My private show sales had been more than doubling year-to-year since we started in 2005,” she said.

But today, her company is on the mend. Sales in 2010 were up 10% over 2009, a year in which revenues plunged 30%. She expects 2011 sales to be 15% higher than 2010 sales, with most of her jewelry retailing for $2,000 to $6,000.

She’s not the only luxury purveyor who sees business picking up. Many struggling high-end brands were “kicked out of the market” during the recession, according to consulting firm Bain & Co.’s annual Luxury Goods Worldwide Market Study. The luxury sector has been steadily recovering, with sales up 10% in the last quarter of 2010.

Certainly, a rebound is far off for many players in New York’s luxury sector. Milton Pedraza, chief executive of Manhattan-based research firm Luxury Institute, says the jewelry and watch industries were hit especially hard over the past two years, and recovery will be tougher.

Firms that expanded aggressively or took on debt to prepare for growth that never came often faltered, says Ketty Pucci-Sisti Maisonrouge, president of Manhattan-based luxury industry consulting firm KM & Co., who also teaches a course at Columbia Business School.

“The businesses that reached out the most into aspirational luxury were the most affected,” she said. “If their bottom line was relying heavily on younger executives who don’t make as much money as the truly affluent but still want the Louboutin shoes, they were out of luck, because those people stopped spending.”

Ms. Brandes found that a nimble marketing strategy was vital to weathering tough times. She expanded a blog she launched in 2007 to help make her jewelry and other luxury goods less intimidating to the average consumer. It now receives about 17,000 views a month. She also has about 3,000 followers on Twitter.

“I developed a network of people who think of me as a friend, and when they got engaged or celebrated an anniversary, they [came] to their friend to design the jewelry,” she said.

SWEET DREAMS UP 40%

A flexible approach to pricing helped Magniflex, which sells mattresses that start at $1,000 but can run as high as $24,000. The company offered decorators discounts of 20% to 30% and offered boutique hotels and single-store retailers the same discounts it gave to larger hotels and retailers. It also provided five-day delivery in the U.S. for $45, says Andrea Mugnai, general manager for Magniflex North America, based in SoHo. U.S. sales increased 40% from 2009 to 2010 in large part because of these programs.

Private Picassos, a Brooklyn-based art education company, grew by introducing lower-priced classes. In 2006, the company provided private art lessons to children of wealthy clients. When the recession caused a slowdown, owner Valeen Parubchenko started offering group classes and giving a discount to parents who committed to 10 lessons. She began holding classes at retailers and bookstores in late 2008, and demand rose in 2009 and 2010.

“The lessons aren’t customized for the child, but it’s also less expensive-$22.50 per child, as opposed to $85 an hour for private lessons,” said Ms. Parubchenko.

October 29, 2010

The Paris Biennale – an event dedicated to the finest art and antiques in the world – has once again wowed jewellery lovers by playing host to an eye-popping abundance of jewels with price tags in the millions, says Claire Adler

By Claire Adler
Canary Wharf
October 2010

This September, Paris saw jewellery presented to the super-rich and connoisseurs on supremely elaborate exhibition stands. It was all part of the Paris Biennale – the bi-annual invitee-only art and antiques fair – which recently took place for the 25th time, in the palatial setting of the Grand Palais.

The Paris Biennale des Antiquaires is the most prestigious fine art and antiques fair in the world. First held in 1962, the exhibition’s original organisers hoped the beauty of the objects on show would rival the beauty of the women who came along to ogle them.

French jeweller Cartier has been an exhibitor since the show’s beginnings, while this year Chanel, Van Cleef & Arpels showed for the third time, and Dior for the second time. Harry Winston is the only American jeweller at the show, but with a shop in Paris since 1955, it first exhibited at the Paris Biennale in 1974, then again 2000 and has been a regular ever since.

“The Paris Biennale is a rendezvous of all the world’s jewellery connoisseurs,” said CEO of Harry Winston, Frederic de Narp, before the show opened. “As a French person, I’m thrilled to be part of it. We have 20 salons round the world, but this is where we’re launching our newest collection, the Royal Garden collection, and we’ll meet with all our important clients here.”

When it comes to the rarest, most exquisitely crafted and precious jewellery on the planet, it’s all very much a ‘by appointment, guest list only, price on application’ affair.

Behind the scenes information is hard to come by, but at the same event two years ago, jewellery transported by Harry Winston alone was said to be worth £50 million, though it may easily have been more.

This year, Chanel’s most expensive piece on show was the intricate Plume necklace, for sale at a cool €1.6 million, along with the matching brooch – yours for €220,000.

The Plume, or feather, is a variation on a theme originally dreamed up by Mademoiselle Chanel for the launch of her very first fine jewellery collection in 1932. The brooch might be a tad expensive, but it’s certainly versatile. The experts say it can be worn over a shoulder, as a sparkling headdress, or pinned onto a hat or a (inevitably Chanel) skirt suit.

Over at Van Cleef & Arpels, certain individual pieces just skirted the €3 million mark, with some jewels having already been snapped up by July time, based on drawings alone. Dior’s display included pieces designed up to 11 years ago, including delectable, intricate cocktail rings by Dior designer Victoire de Castellane, from her collection Les Incroyables et les Merveilleuses, made in 1999, which went on to spark a trend for enormous, bold and beautiful rings.

Chanel upped the ante this year by filling a booth twice the size of the space it took in 2008, and bringing in New York architect Peter Marino to design it. Marino is the man behind Louis Vuitton’s Bond Street flagship store, which opened early this summer.

Meanwhile, the display of this year’s Van Cleef & Arpels collection, Les Voyages Extraordinaires, inspired by the books of Jules Verne, bore a far greater resemblance to a fantastical art installation than any display you’d expect to see at an antiques fair. But that was hardly surprising, given that Alfredo Arias – the Argentinian artist, actor and director who had created it – has conceived sets for opera houses from La Scala in Milan to the Opera in Paris, and is the proud owner of a five-page CV enumerating his books, films and fantastical theatre productions, as well as the accolades he has received in Italy, Argentina and France. This includes the multiple French honour of being appointed Chevalier, Officier and Commandeur des Arts et des Lettres.

“I would not miss this occasion, which is a high-level artistic event, for anything in the world. Jewellery is an art form,” said Arias.

“The dreamlike world of Jules Verne resonates with that of a Maison whose artistic heritage is built around the beauty of flora and fauna, the sky and the stars, imaginary creatures,” said Nicolas Bos, creative director of Van Cleef & Arpels.

One question remains. Is there a market for this extraordinary and outrageously expensive jewellery? New York-based luxury expert, CEO of the Luxury Institute Milton Pedraza believes there is: “There will always be a market for these products and especially in Greater China, India and the Middle East, where wealth continues to grow. Wealthy people just want the best and they will pay for it. The concept is an old one with new price levels,” he says.